London: Oil on Monday held just below $80 (Dh293.75) a barrel, paring much of an earlier gain to a six-week high, as the dollar came under pressure and a strike at French oil refineries entered its sixth day and spread to other plants.
The dollar weakened as the impact of last week's surprise rise in a US central bank emergency lending rate faded. Oil also gained a lift from rising crude oil processing in China and tensions over Iran's nuclear programme.
US crude for March delivery rose 5 US cents to $79.86 a barrel by 1446 GMT. It earlier reached $80.51 — the highest for a nearby contract since January 13. Brent crude for April rose one cent to $78.20.
"We're seeing some risk appetite returning with the dollar weakening against other currencies," said Mike Wittner, oil analyst at Societe Generale.
A weaker dollar makes crude and other dollar-denominated commodities cheaper for holders of other currencies and tends to support oil prices. Gold climbed to a one-month high.
Oil in New York rose 7.7 per cent last week, the largest single-week percentage gain since October. The market's peak so far in 2010 is $83.95 on January 11.
Some investors have taken the view that the recent rally was overdone, analysts said.
"Oil looked toppish at $80, that's the upper end of the trading range," said Carsten Fritsch, analyst at Commerzbank. "It's unlikely to see a level of $80 being sustained given still-weak fundamentals. Physical demand is still lacklustre, outside China at least."
